Administration Report

The Board of Directors and the Chief Executive Officer (CEO) of Fingerprint Cards AB hereby present the Annual Accounts for the 2025 fiscal year.

Fingerprints’ operations

Fingerprint Cards AB (FPC) is a global biometrics leader, offering intelligent edge to cloud biometrics. We envision a secure, seamless world where you are the key to everything. Our solutions – trusted by enterprises, fintechs, and OEMs – power hundreds of millions of products, enabling billions of secure, convenient authentications daily across devices, cards, and digital platforms. From consumer electronics to cybersecurity and enterprise, our cloud-based identity management platforms support multiple biometric modalities, including fingerprints, iris, facial, and more. With improved security and user experience, we are driving the world to passwordless.

Group and Parent Company

The annual accounts cover the fiscal year January 1–December 31, 2025. Fingerprint Cards AB (Publ) (Corp. Reg. No. 556154-2381) is the Parent Company of a Group including 17 Groupcompanies.

The Parent Company has its registered office in the Municipality of Gothenburg in the county of Västra Götaland. The company’s shares are listed on Nasdaq Stockholm since 2000.

Earnings trend 

The Group’s revenue for the period January–December 2025 totaled SEK 78.2 M (60.2), corresponding to an increase of 30 percent compared with 2024. This reflects strong demand across our portfolio of biometric authentication solutions and underscoring the growing traction of our strategy to focus on high-value markets.

Gross profit for the period January-December 2025 was SEK 47.5 M (36.6) and the gross margin was 60.7 percent (60.9).

The operating result improved significantly compared with 2024 (from SEK -421.1 M to SEK -59.2 M). The prior year was impacted by one-off items related to the transformation of the business, primarily write-downs and restructuring costs. In 2025, the result reflects a materially lower cost base: selling and administrative expenses have decreased due to a leaner organization and lower external spend, while development costs (including amortization and impairments) have declined following reduced capitalization and lower amortization levels. In addition, other operating income increased, mainly driven by licensing of assets, reported as Other operating income.

Exchange-rate effects are recognized in operating profit under the item Other operating income. The result before tax for the year was SEK -63.3 M (-465.9), while income tax of SEK -3.1 M (0.0) was recognized. In total, the Group’s full-year result amounted to SEK -58.6 M (-688.3). The Group’s earnings per share for 2025 were SEK -8.31 (-278.18). Earnings per share from continuing operations amounted to SEK -9.42 (-188.31).

Current factors of uncertainty

The global macro environment remains volatile. The ongoing war between Russia and Ukraine, and related sanctions and countermeasures, may – even without material direct exposure – indirectly impact the Group through energy prices, inflation, interest rates, currency and market volatility, and disruptions to supply chains and logistics. In addition, escalating geopolitical tensions and armed conflicts in the Middle East – including the Israel–Palestine conflict and the ongoing military escalation between the U.S./Israel and Iran – contribute to heightened uncertainty and the risk of further volatility in energy and commodity markets. A more unpredictable trade policy environment, including new or expanded tariffs, sanctions and export restrictions, may result in higher costs, delays in supply chains, and weaker demand in certain end-markets. Developments in inflation and interest rates may also impact financing conditions, customers’ willingness to invest, and the Group’s cost base, and are monitored on an ongoing basis.

Financial position

Shareholders’ equity amounted to SEK 271 M (277) and the equity/assets ratio to 91 percent (65). 

Fixed assets decreased to SEK 222 M (296). The share of fixed assets in relation to total assets increased to 74 percent (70). Inventories decreased to SEK 21 M (48) and outstanding accounts receivable declined to SEK 8 M (56).

Accounts payable at year-end amounted to SEK 10 M (40) and other current liabilities amounted to SEK 11 M (87).

Long-term liabilities amounted to SEK 0 M (3). 

Cash and cash equivalents amounted to SEK 27 M (12) at year-end.

Investments, depreciation/amortization and impairment losses 

During 2025, investments totaled SEK 1 M (12). Of this total, SEK 1 M (12) was invested in capitalized development and intangible fixed assets, SEK 0 M (0) was invested in property, plant and equipment and SEK 0 M (0) was received in financial fixed assets. The lower level reflects a more focused and streamlined organization and a more capital-light development approach, reducing the need for larger capitalized development investments. Total depreciation/amortization according to plan and write-downs amounted to SEK -40 M (-378) in 2025. Of this total, amortization of intangible fixed assets accounted for SEK -34 M (-83), write-downs for SEK -0 M (-288) and depreciation of property, plant and equipment for SEK -1 M (-1). Right-of-use assets were depreciated by SEK -5 M (-6).

In total, the carrying amount of intangible fixed assets in 2025 was SEK 163 M (230), while property, plant and equipment amounted to SEK 1 M (2) and right-of-use assets pertaining to the leasing of premises amounted to SEK 4 M (8).

Obsolescence has occurred for fully written-down capitalized development costs that can be attributed to discontinued operations and no longer generate any revenue streams.

Cash flow

Cash flow from changes in working capital components was positively impacted by a reduction in capital tied-up in current receivables in the amount of SEK 35 M (84), and by a decrease in inventories in the amount of SEK 6 M (35). Cash flow from operating activities amounted to SEK -56 M (-208).

Cash flow from investing activities was SEK -1 M (-12).

Cash flow from financing activities was SEK 74 M (118).

The overall net change in cash and cash equivalents for full-year 2025 was SEK 15 M (-98), whereof SEK -17 M (-55) comes from discontinued operations. Net cash amounted to SEK 24 M at year-end 2025, compared with net debt of SEK 8 M at the end of 2024. Interest-bearing liabilities at the end of 2025 amounted to SEK 0 M. Lease liabilities pertaining to office premises amounted to SEK 3 M (7) at the end of 2025, recognized in accordance with IFRS 16.

Revenue breakdown 

Revenue is reported by country. Presented in Note 2. 

Effect of of the wind-down of the Mobile and PC product groups

FPC has completed the wind-down of its loss-making operations in the Mobile and PC product groups in order to safeguard the company's financial health and future viability. The financial effects of the wind-down are presented separately for the full year 2024 and for the full year 2025, as outlined below.

Effects of the wind-down in the January - December 2024 period

Mobile

• An inventory write-down amounting to SEK 54.7 M and a SEK 7.1 M impairment of capitalized R&D.

• As a result of the exclusive partnership agreement with Egis Technology in the Mobile area, Fingerprints has thus far recognized SEK 39.7 M in revenue.

• SEK 28.6 M in costs related to restructuring measures.

• Revenue positively impacted by a reversal of accrued marketing incentives to customers in the Mobile area, amounting to SEK 24.7 M.

PC

• A SEK 32.3 M write-down of capitalized R&D projects in the PC area. 

Effects of the wind-down in the January - December 2025 period

Mobile

• An inventory write-down amounting to SEK 6.6 M.

PC

• An inventory write-down amounting to SEK 10.2 M.

• Revenue positively impacted by a reversal of accrued marketing incentives to customers in the PC area, amounting to SEK 6.9 M.

Parent company's financial development

The Parent Company’s financial performance in 2025 should be viewed in the context of the operational restructuring in which the operations of the Singapore entity were transferred to the Swedish Parent company, assumed ownership of inventories and began invoicing customers. This represents a clear change compared with 2024, when no inventories were recognized in the Parent Company because the inventory was owned by the Singapore subsidiary.

As a result of the revised operating model, in addition to IP licensing transactions completed during the year, the Parent Company’s revenue increased to SEK 59.7 M for the full year 2025 (2.3). At the same time, the Parent Company’s cost of sales increased as a larger share of sales became goods-based, supporting an improvement in gross profit for the full year to SEK 47.1m (0.1). Despite this, operating profit/loss for the full year was SEK -59.6 M (SEK -26.7 M) and profit/loss for the year was SEK -130.6 M (-422.1), primarily reflecting the cost base and net financial items.

The balance sheet also clearly reflects the change, with the Parent Company reporting inventories of SEK 21.1 M at year-end (0.0).

Finance Policy

FPC’s Finance Policy regulates and clarifies responsibilities, and states guidelines in specific areas within financing, credit insurance, investment and currency management with the aim of supporting operations, managing financial risks and controlling their impact on financial position, results of operations and cash flow. The most important net currency flow is in USD, whereupon a significant portion of FPC’s finance activities were in formulating a strategy for selling USD and buying SEK. The increased net surplus from sales, which is denominated in USD, and the increasing operating expenses that are predominantly denominated­ in SEK generate a continuous need to convert USD to SEK. Materials procurement, manufacturing and sales are essentially denominated in USD only. Fluctuations in other exchange rates have an insignificant impact on earnings. According to the Finance Policy, currency hedging using derivative instruments is not permissible. See Note 23 for more information on financial risks.

Organization and coworkers

There were 39 (53) employees as of December 31, 2025 comprising 30 (39) men and 9 (14) women. Including employees and consultants, FPC employed a total of 50 (71) people on December 31, 2025.

Research and development operations

Through continuous initiatives to enhance biometric technology, Fingerprints has attained leadership in fingerprint recognition.

Expenditure for technology development is partly recognized as a cost in the Consolidated Statement of Comprehensive Income (Parent Company Income Statement) under the development costs heading, and partly through capitalization in the Consolidated Statement of Financial Position (Parent Company Balance Sheet), and capitalized development expenditure, under intangible fixed assets.

Capitalization is effected after an assessment of factors such as each project’s commercial, financial and technical potential, its future value for the Group, disposal over rights to the product/solution, the potential for completing development and the presence of a market for the product.

The rate of amortization is determined on the basis of the technical and commercial lifespan of the product/solution related to the existing market. Accordingly, the amortization term varies between products and projects.

In 2025, the Group’s expenditure on technological development and patents amounted to SEK 22 M (90), of which SEK 1 M (12) was capitalized in the Consolidated statement of financial position and the remaining SEK 23 M (102) was expensed in the Consolidated statement of comprehensive income.

Sustainability Report

In accordance with Chapter 6, Section 11 of the Swedish Annual Accounts Act, Fingerprints has decided to prepare a statutory Sustainability Report as a separate document from the Annual Report.

FPC's Sustainability Report, which also constitutes the company's statutory Sustainability Report, satisfies the Swedish Annual Accounts Act’s requirements for sustainability reporting. The report is presented on pages 27-34.

Ownership structure

In 2025, the number of shareholders decreased to 24,340 at year-end from 50,991 at the beginning of the year. The decrease is mainly attributable to the reverse share split (1:2,000) completed during the year, which changed the share structure and affected the registration of holdings (including cash compensation for any excess shares in connection with the reverse split).

Expectations regarding future performance

Looking ahead, we will build on our progress during 2025 with a continued focus on execution. This includes further concentrating the organization around AllKey, simplifying customer adoption, expanding the platform offering, and converting momentum into sustainable, profitable growth. We will remain proactive in asset monetization and IP licensing, while maintaining strict cost and cash discipline to fund our transition from sensors to systems.

Following the approval by the Extraordinary General Meeting on 30 April 2026 of the merger plan between Fingerprint Cards AB and Precise Biometrics AB, the planned combination is expected to create the conditions for a more efficient, scalable and commercially stronger business. Through the merger, the combined company is expected to benefit from a strengthened offering, broader market presence and improved ability to meet customer needs in biometric and identity-related solutions. The merger is expected to generate annual cost synergies of at least SEK 45 million, in addition to commercial synergies through a broader customer base and increased opportunities for upselling and cross-selling. As a result, the combined company is expected to be better positioned for future organic growth and continued market consolidation. Furthermore, following completion of the merger, the combined company intends to carry out a rights issue of approximately SEK 110 million in order to finance growth initiatives, support the integration process, capture identified synergies and enable continued global expansion.

Remuneration of the Board of Directors

The 2025 Annual General Meeting (AGM) resolved that Board remuneration shall be SEK 675,000 to the Chairman of the Board and SEK 295,000 to each other Member of the Board. No remuneration shall be paid to a Board member that is employed and paid by the Company. No fee for work on committees shall be paid. The adjusted Board remuneration implies a significant cost saving for the Company.

Executive remuneration guidelines

The 2024 AGM decided in accordance with the proposal that the Remuneration Committee shall prepare guidelines for compensation and employment terms for the CEO and other senior executives and put forward proposal to the Board for decision. The guidelines are valid for four years.

Introduction

The Executive Management is defined as the Chief Executive Officer and other members of the management team. The purpose of these guidelines is to clarify the compensation as decided.

The guidelines are forward-looking, i.e. they are applicable to remuneration agreed, and amendments to remuneration already agreed, after adoption of the guidelines by the annual general meeting. The general meeting has the right to agree on additional remunerations outside of these guidelines.

Remuneration committee

The remuneration committee evaluates and considers matters regarding remuneration and employment terms and prepares proposals for guidelines for compensation to the CEO and executive management. The Board of Directors shall evaluate a proposal for new guidelines at least every fourth year and submit it to the AGM. The guidelines shall be in force until new guidelines are adopted by the general meeting. The Remuneration Committee should ensure that remuneration is commensurate with prevailing market conditions for corresponding executives in other companies, and accordingly, that the company’s offering to its employees is competitive. The CEO’s compensation is approved by the Board of Directors. Compensation to other senior executives is decided by the CEO after consulting with the Remuneration Committee. The members of the remuneration committee are independent of the company and its executive management. The CEO and other members of the executive management do not participate in the board of directors’ processing of and resolutions regarding remuneration-related matters in so far as they are affected by such matters.

Promotion of the company’s business strategy, long-term interests and sustainability

Fingerprint Cards aims to attract, engage, develop and retain the right people to drive our business result in line with the company’s business strategy. In order to support this, the design and implementation of our remuneration structure shall be performance based; affordable; sustainable; market driven and clear. Compensation shall reflect the scope and complexity of each role, as well as the actual performance of the individual. Fingerprint Cards does not tolerate any form of discrimination and we perform annual reviews to make sure we do not have any salary misalignments based on any discriminating factors such as gender, transgender identity or expression, ethnicity, religion or other belief, disability, sexual orientation and age.

Variable remuneration covered by these guidelines shall aim at promoting Fingerprint Card’s business strategy and long-term interests, including its sustainability.
For more information regarding the company’s business strategy, please see www.fpc.com

Remuneration under employments subject to other rules than Swedish may be duly adjusted to comply with mandatory rules or established local practice, taking into account, the overall purpose of these guidelines.

Remuneration principles

Performance-based

There shall be a strong link between performance (individual - and business result) and compensation. Base salary will depend on the employee’s performance against objectives, development progress and living our company values.

Competitive and sustainable

We must create value to secure our present and future capability to pay competitive compensation and we must earn the means for our compensation. It is important to have a balance between our company earnings and our compensation levels.

Market driven

Our salaries shall reflect the scope and complexity of the work. It is our objective to compare our base salaries with relevant market data for the applicable country. Each country forms its own market.

The remuneration principles are also applicable to the rest of the employees at Fingerprint Cards.

In the preparation of the board of directors’ proposal for these remuneration guidelines, salary and employment terms for employees of the company have been taken into account by including information on the employees’ total income, the components of the remuneration and increase and growth rate over time, in the remuneration committee’s and the board of directors’ basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable.

Total remuneration

The total remuneration to Executives consists primarily of monthly base salary, short-term incentives, pension, and insurances. If decided in the general meeting, the total remuneration may also include – irrespective of these guidelines – long term incentives.

Short Term Incentive (STI)

Short Term Incentives shall be linked to predetermined and measurable criteria. The Short-Term Incentives include company measures such as Revenue, Operating Profit and Cash Balance. For Executives, 80-90 per cent of the STI is based on company measures, and 10-20 per cent is based on individual performance, with predetermined targets on an annual basis. The criteria shall be designed so as to contribute to Fingerprint Card’s business strategy and long-term interests, including its sustainability.

The satisfaction of criteria for awarding STI shall be measured over a period of one or several years. The variable cash remuneration may amount to not more than 100 per cent of the total fixed base salary during the measurement period.

For financial objectives, the evaluation shall be based on financial information made public by the company.

Pension

Pension plans are based on defined contribution models, where a premium is paid amounting to not more than 30 per cent of the Executive’s fixed annual base salary.

Insurances

Executives are provided insurance coverage in accordance with local market practice. Such benefits shall be customary and be of limited amount.

Termination of employment

Upon termination of an employment, the notice period may not exceed six months. During the notice period, the executive will continue to receive full base salary and other employment benefits. Upon termination by the company, severance payment could be paid and may not exceed twelve months’ base salary. When termination is made by the executive, the notice period may not exceed six months, without any right to severance pay.

Additionally, remuneration may be paid for non-compete undertakings. Such remuneration, if applicable, shall amount to a maximum of 60 per cent of the monthly base salary at the time of termination of employment, unless otherwise provided by mandatory collective agreement provisions.

The Board of Directors’ right to deviate from the remuneration guidelines 

In certain cases the Board of Directors may decide to deviate from these guidelines, in part or in total, if there are special reasons to do so in an individual case and a deviation is necessary to fulfill the company’s long term interest, including in relation to sustainability, or to safeguard the company’s financial position. As set out above, the remuneration committee’s tasks include preparing the board of directors’ resolutions in remuneration-related matters. This includes any resolutions to derogate from the guidelines.

Description of significant changes and how the shareholders' views have been taken into account

There have been no significant changes to the proposed new guidelines in relation to the remuneration guidelines adopted by the Annual General Meeting 2020. There have been no material comments on the remuneration guidelines from shareholders.    

Description of the work of the board of directors during the year  

Scheduled agenda items at Board meetings during the year are Group Management’s reporting of business conditions, operations, organizational resources, results of operations, financial position and liquidity. During the autumn, and before Christmas, Board meetings consider the budget and business plan for the following year. The Board met on 24 occasions in 2025. A more detailed description of corporate governance in 2025, including regulations, general meetings, the Nomination Committee, the composition and work of the Board and internal governance processes and internal control, is presented in the separate Corporate Governance Report.

2026 Annual general meeting

The AGM will be held on Wednesday, June 3, 2026.

Proposal for appropriation of the company’s profit

The following funds are at the disposal of the AGM, SEK:

The Board of Directors proposes that net profit for the year, non-restricted reserves, as well accumulated profit or loss be appropriated as follows:

To be carried forward:  SEK -103,057,800.

Regarding the company’s results of operations and financial position in other respects, the reader is referred to the following financial statements, with the associated notes.

Events after the balance sheet date

On February 11, 2026, Fingerprint Cards announced that Board member John Lord has informed the Company of his decision to step down from the Board of Directors due to other professional commitments. The Nomination Committee has been informed and continues its work to review, identify and propose new potential board members for election at a general meeting.

On March 23, 2026, Precise Biometrics AB (publ) (“Precise Biometrics”) and Fingerprint Cards AB (publ) (“Fingerprint Cards”) jointly announced that the board of directors of Precise Biometrics and the board of directors of Fingerprint Cards have adopted a joint merger plan (the “Merger Plan”) for merging the companies through a statutory merger in accordance with the Swedish Companies Act (the “Merger”). The Merger will be implemented by Precise Biometrics absorbing Fingerprint Cards, whereby the shareholders in Fingerprint Cards will receive nine (9) new ordinary shares in Precise Biometrics for each share in Fingerprint Cards, irrespective of share class. The Merger, constituting a merger of equals, will create a combined business with a stronger offering, a strengthened commercial reach, realize meaningful synergies, and establish a profitable foundation with necessary scale for future organic growth and consolidation. The Merger is expected to generate cost synergies with an estimated full annual run-rate effect of at least SEK 45 million (corresponding to approximately 29 percent of the Combined Company’s 2025 pro forma revenue). In addition, the combination is expected to unlock meaningful commercial synergies through upselling and cross-selling across the combined customer base and increased share of customer wallet. Following completion of the Merger, the Combined Company intends to raise approximately SEK 110 million through a rights issue of shares, with proceeds to be used to accelerate growth, capture identified synergies and support continued expansion of the Combined Company globally. The completion of the Merger is conditional upon, inter alia, approval by the shareholders of each of Precise Biometrics and Fingerprint Cards at their respective general meetings. The board of directors of Fingerprint Cards unanimously recommends the shareholders of Fingerprint Cards to vote in favor of the completion of the merger. The Board of Directors believes the Merger to be significantly value-adding for shareholders and other stakeholders, as it will create a combined business with a stronger offering, strengthened commercial reach, realize meaningful synergies and a profitable foundation with necessary scale for future organic growth and consolidation.

In the first quarter of 2026, the boards of Fingerprint Cards AB and Precise Biometrics AB signed a merger plan for the combination of the two companies. As the merger results in the Company's tax loss carryforwards no longer being available for utilisation, the Company derecognised the related deferred tax assets as of 31 March 2026. In light thereof, the Board took appropriate measures to remedy the equity shortfall by a reduction of the share capital. On 30 April 2026, the Extraordinary General Meeting resolved to approve the merger plan, to amend the Company's articles of association, and to reduce the Company's share capital to cover loss. The share capital reduction remedied the equity shortfall resulting from the derecognition of the deferred tax assets.